Judge: Hospital can’t claim virus losses

Chan Soon-Shiong Medical Center’s insurance company refused to pay out

A Windber hospital does not have a claim against its insurance company for its loss of business income and extra expenses caused by the COVID-19 pandemic, U.S. District Judge Kim R. Gibson in Johnstown ruled.

The Chan Soon-Shiong Medical Center, which has facilities in Windber, Johnstown and Portage, last April filed a class action lawsuit against Travelers Property and Casualty Co. of Hartford, Conn., challenging a company decision not to cover financial losses due to shutdown of facilities and furlough of employees that resulted from Gov. Tom Wolf's orders during the pandemic.

The hospital claimed it and other hospitals were entitled to recover "continuing normal operating expenses ... as a result of losses and damages stemming from orders issued by the government in response to the COVID-19 pandemic."

Specifically, the hospital sought the loss of business income due to the suspension of its operations and the "extra expense" during a period of restoration.

The hospital asked the judge to issue a declaration that the hospital's insurance policy provided coverage.

Gibson came down on the side of the insurance company, denying that the company had to provide coverage for the loss of business income because the hospital did not lose the use of its property due to physical damage.

He ruled, "There was not a complete prohibition on access to Windber's property as a result of damage to a surrounding property, there was no physical damage at all."

He concluded his opinion by pointing out that the Travelers policy also contained a "Virus Exclusion."

That exclusion stated, "Travelers will not pay for loss or damage caused directly or indirectly by any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease."

Gibson ruled that the hospital is not entitled to coverage under the policy, noting "even if Windber had established an initial right to coverage, the virus exclusion bars Windber's claim under any and all provisions of the policy."

The hospital did not respond to requests for comment.